CVC pulls out of GE talks over Areva unit

Private equity fund CVC has pulled out of talks with General Electric about a possible joint bid for the power and transmission unit of France’s Areva, a French financial news service reported on Sunday.

Spokesmen for the firms involved could not immediately be reached for comment.

State-owned nuclear reactor group Areva is selling its T&D unit and has selected Japan’s Toshiba, a consortium led by US-based GE, and French partners Alstom and Schneider Electric as possible buyers.

Binding offers are expected for November 9 ahead of an Areva decision set for November 16.

Citing banking sources, news service Wansquare, a joint venture between the Journal des Finances and Le Figaro newspapers, said that CVC had withdrawn from the GE-led consortium because of disagreements with the US power giant.

The disagreements were over the voting rights CVC would have in the consortium, should it win the bid for Areva T&D and not over financial or industrial concerns, Wansquare wrote.

“To replace CVC, Clara Gaymard (head of GE’s French division) is seeking a last-minute alliance with Axa Private Equity,” Wansquare wrote.

According to a report in the French business daily Les Echos on Friday, GE was talking to sovereign funds in Singapore, Korea and Qatar about its possible bid for Areva T&D.

An alliance with one of them could reduce CVC’s interest and increase that of GE, the paper said.

Economy Minister Christine Lagarde has said the offers for T&D would be assessed on the basis of price, industrial strategy and employment issues.

Areva, in which the French state holds a 91 percent stake, is selling the T&D unit, which analysts valued at between €3bn and €5bn euros, as part of an €11bn plan to fund expansion that includes a capital increase.

Several analysts have told Reuters that initial offers for T&D would not exceed €4bn.